President Barack Obama’s decision on whether to approve the controversial Keystone XL pipeline looms huge now that the election is over, and it could define Obama on energy and climate change.
The oil industry, which is pushing hard for approval, describes the choice as the president’s “first test to the American people.” Environmental groups are promising that thousands of activists will demonstrate against the pipeline Sunday outside the White House, just the beginning of the efforts that are being planned to sink the project.
Energy analyst Charles Ebinger said he thought two weeks ago that there was little chance Obama would kill the pipeline. But he’s increasingly less sure about that.
“It appears major environmental organizations and strong environmental supporters of the president are suggesting this is a litmus test for whether the second Obama administration is with them or against them,” said Ebinger, who’s a senior fellow at the Brookings Institution research center in Washington.
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Last January, Obama denied a permit for the northern section of the pipeline, saying the route through Nebraska needed more environmental review. That put off his final decision on the 1,700-mile pipeline, which would bring oil from the Alberta oil sands in Canada to U.S. refineries on the Gulf Coast, until after the election.
Environmentalists were thrilled. The Congressional Research Service concluded this year that crude oil from the sands produces 14 percent to 20 percent more planet-warming gases than the average oil in U.S. refineries does. It found, based on a review of available studies, that approval of the pipeline could be the equivalent of putting up to 4 million more cars on the road.
The figures are disputed, but even a more conservative new assessment by the energy research group IHS CERA found that the oil sands produced 9 percent more greenhouse gases than average.
“This decision has huge implications in terms of what direction we go in as a nation in the near term in addressing climate,” said Jim Murphy, senior counsel for the National Wildlife Federation.
“By saying yes to this pipeline, you’re basically saying yes to the dirtiest, most carbon-intensive fuel out there.”
Murphy said the decision came as extreme weather events such as Hurricane Sandy were focusing attention on climate change.
Obama has given little clue as to his intentions. He said this week that, in general, he believed that climate change was real and there was an obligation to deal with it. But he also talked about jobs.
“Understandably, I think the American people right now have been so focused, and will continue to be focused, on our economy and jobs and growth, that if the message is somehow we’re going to ignore jobs and growth simply to address climate change, I don’t think anybody is going to go for that. I won’t go for that,” he said.
The Keystone project is a chance for the president to boost the economy and create jobs, said Marty Durbin, the executive vice president of the American Petroleum Institute, a trade association for the oil and natural-gas industry.
“President Obama campaigned on job creation and on an all-of-the-above energy strategy, including more oil and natural gas,” Durbin said.
The Obama administration said its delay of the project was about the environmental impact on Nebraska, not climate change. Pipeline developer TransCanada has since changed the route so it bypasses the ecologically sensitive Sand Hills region. The route still passes over part of the Ogallala aquifer, though, a huge underground source of water.
Canadian Prime Minister Stephen Harper recently said he was optimistic that Obama would approve the project. Moody’s Investors Service agreed in a report this week.
“We believe the White House will reverse course and approve the Keystone XL pipeline, which would ship crude from Canada’s western oil sands to the Gulf Coast,” the rating agency said in its report analyzing the economic implications of Obama’s victory in the presidential election. “But approval will not be quick.”